Marriott Vacations (VAC) Lags Q3 Earnings & Sales Estimates

Marriott Vacations Worldwide Corporation VAC operates as a vacation ownership company. The company markets and manages vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands, The Ritz-Carlton Destination Club brand, The Ritz-Carlton Residences brand.

Marriott Vacations continues to benefit from positive timeshare industry trends and has been able to maintain a steady flow of clients by offering tours to diverse locations and programs with greater outreach.

The company has been recording higher contract sales and rental revenues lately. Also, volume per guest – sales volume for a given period divided by the number of groups toured – for Marriott Vacations continues to increase backed by strong marketing initiatives.

However, as the timeshare industry is extensively marketing-oriented and relies heavily on sales initiatives to attract customers, the company’s increased marketing expenses have been pressurizing margins.

Investors should note that the consensus estimate for VAC has hardly witnessed any significant movement over the last 60 days. Meanwhile, VAC’s earnings have been mixed over the past few quarters. The company has posted positive earnings surprises in two of the last four quarters, with an average beat of 1.35%. Revenues have outpaced the Zacks Consensus Estimate in just one of the trailing four quarters.

We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: VAC missed on earnings. Our consensus earnings estimate called for earnings per share of $1.20, and the company reported earnings of 96 cents per share. Investors should note that these figures take out stock option expenses.

Key Stats to Note: In third-quarter 2016, North America volume per guest (VPG) decreased 1.7% year over year. Adjusted EBITDA were $50.6 million, down 7.5% year over year.

Stock Price Impact: At the time of writing, the stock price of Marriott Vacations was down nearly 10% during pre-market trading hours following the earnings release.

Check back later for our full write up on this VAC earnings report!

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